To add a little levity this week as we enter month 3 of shelter in place I have broken down the market news using quotes from Game of Thrones (a worthwhile binge watch if you haven't seen it).
“No one mind me. All I’ve ever done is live to a ripe old age.” — Ser Davos
Legendary investor Warren Buffett and his company (Berkshire Hathaway) continue to sit on a record stockpile cash, Buffett says he has not been on a buying spree, because there hasn’t been anything “that attractive.” He went on to say "the best thing to do is owning the S&P 500 index fund, If you bet on America and sustain that position for decades, you’d do far better than buying Treasury securities, or far better than following people ... Perhaps with a bias, I don’t believe anyone knows what the market is going to do tomorrow, next week, next month, next year,”
In his 89 years on this earth Buffett has more often been right than he has been wrong, we should probably pay attention when he speaks.
“If you think this has a happy ending you haven’t been paying attention.” — Ramsay Bolton
Trade war part two? Tensions with China continued to flare, with the U.S. Senate unanimously passing a bill requiring companies to certify that they are not owned or controlled by a foreign government as a condition of listing on a U.S. exchange. The bill would also limit foreign companies’ access to U.S. financial markets if they fail to meet certain accounting and auditing standards. While the legislation would affect any foreign company, China is seen as a main target.
“Winter is coming.” — Ned Stark
Government officials continue to try to temper the market expectations for economic recovery. Federal Reserve Chairman Jay Powell told senators on Tuesday, “The scope and speed of this downturn are without modern precedent and are significantly worse than any recession since World War II.” He suggested again that another round of fiscal stimulus may be necessary. Other Fed officials echoed his view, including Boston Fed President Eric Rosengren, who said in a speech, “Now is the time for both monetary and fiscal policy to act boldly to minimize the economic pain from the pandemic.” The Treasury Secretary, Steve Mnuchin warned of “the risk of permanent damage” if businesses remain closed for an extended period of time.
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